NAR has received many inquiries from our members regarding how first-time homebuyers can use the tax credit with Federal Housing Administration (FHA) loans. NAR created a flyer to help members understand how the tax credit can be used in their respective state.
The flyer identifies how to use the tax credit in one of the 11 states where housing finance agencies offer a product that monetizes the tax credit for FHA loans. It also provides some guidance for all other states where such programs do not currently exist.
NAR's FHA and the First Time Homebuyer Tax Credit Flyer
In Depth: 2009 First-Time Home Buyer Tax Credit
Wednesday, June 24, 2009
National Health Care Reform Debate Begins in Earnest
Building off of two years of formal hearings and discussions, the health care reform debate has begun in earnest in Washington, D.C. Congress has set an aggressive timeline for debate with the goal of delivering a final bill to President Obama by October 15.
Five committees - Senate Health, Education, Labor and Pensions, Senate Finance, House Energy and Commerce, House Education and Labor and House Ways and Means - are involved in drafting health reform legislation. In the Senate, two bills, introduced by HELP Committee Chairman, Edward Kennedy (D-MA), and Finance Chairman, Max Baucus (D-MT) respectively, will be considered and then conferenced into one bill that will be put before the full Senate. In the House, the process will be more simple as the three chairs of the respective committees, Henry Waxman (D-CA), George Miller (D-CA) and Charles Rangel (D-NY), plan to introduce a single joint measure.
As outlined, all three bills would provide the self-employed, small employers and those without employer-provided insurance with access to an Exchange that would offer an array of private insurance products that are governed by a uniform national set of rating and underwriting rules. Insurance products offered through an Exchange would available to all eligible applicants regardless of their health history, be guaranteed to be renewed, and would not contain any pre-existing condition exclusions.
In addition, premiums would be set on the basis of a limited number of factors - type of policy, geographic location and age - that would not include health status or claims history. By establishing new rating rules, standardizing administrative functions and creating larger pools of insureds, proponents of the bills believe that premiums will be reduced
NAR has already submitted comments to the Senate HELP Committee on the Kennedy measure and will comment on each of the other proposals as they are released. While much remains to be determined and all proposals will be much amended, many of the elements of the NAR-supported Small Business Health Options Program Act (SHOP) have been, or are expected to be, incorporated into the drafts.
Five committees - Senate Health, Education, Labor and Pensions, Senate Finance, House Energy and Commerce, House Education and Labor and House Ways and Means - are involved in drafting health reform legislation. In the Senate, two bills, introduced by HELP Committee Chairman, Edward Kennedy (D-MA), and Finance Chairman, Max Baucus (D-MT) respectively, will be considered and then conferenced into one bill that will be put before the full Senate. In the House, the process will be more simple as the three chairs of the respective committees, Henry Waxman (D-CA), George Miller (D-CA) and Charles Rangel (D-NY), plan to introduce a single joint measure.
As outlined, all three bills would provide the self-employed, small employers and those without employer-provided insurance with access to an Exchange that would offer an array of private insurance products that are governed by a uniform national set of rating and underwriting rules. Insurance products offered through an Exchange would available to all eligible applicants regardless of their health history, be guaranteed to be renewed, and would not contain any pre-existing condition exclusions.
In addition, premiums would be set on the basis of a limited number of factors - type of policy, geographic location and age - that would not include health status or claims history. By establishing new rating rules, standardizing administrative functions and creating larger pools of insureds, proponents of the bills believe that premiums will be reduced
NAR has already submitted comments to the Senate HELP Committee on the Kennedy measure and will comment on each of the other proposals as they are released. While much remains to be determined and all proposals will be much amended, many of the elements of the NAR-supported Small Business Health Options Program Act (SHOP) have been, or are expected to be, incorporated into the drafts.
Wednesday, June 17, 2009
Freddie Mac modifies Relief Refinance Mortgage program
Freddie Mac recently announced several changes to its refinance offering under its Relief Refinance Mortgage program, designed to assist borrowers who are current on their mortgage payments but would benefit from refinancing into mortgages with terms that better position them for long-term homeownership.
Borrowers now will be able to refinance a Freddie Mac-owned or guaranteed mortgage with any lender affiliated with Freddie Mac, rather than the lender currently servicing their mortgage. Freddie Mac also is increasing the amount of closing costs that can be rolled into the new refinance mortgage.
Borrowers can continue to work with their existing servicer to refinance their mortgage; in most cases the current servicer will not have to re-underwrite the borrower. Freddie Mac will allow the lesser of 4 percent of the new refinance mortgage amount or $5,000 of closing costs, financing costs, and prepaids/escrows to be rolled into the new refinance mortgage. Freddie Mac’s standard postsettlement delivery fees, up to a maximum of 2 percent, will apply to the Relief Refinance Program.
More info here.
Counties Absorbing Huge Cuts in Property Tax Revenue
The Los Angeles County assessor's office announced that it has reduced assessments for 333,000 county homeowners, leading property tax revenue to drop for the first time in recent years. As a result, the county expects to lose about $440 million in property tax revenue, a 1% decrease that county officials had anticipated.
Orange County officials also expect about a 1% decrease, with about a third of the 300,000 homes reviewed receiving reductions, according to Shaw Lin, the assessor's management services manager.
Neighboring counties hard hit by the housing slump face far steeper decreases in property assessments. In Ventura County, officials said property tax revenue is expected to drop 5%; in San Bernardino County, nearly 8%; and in Riverside County, up to 11%.
Riverside County officials described the drop in property tax revenue as the largest in 20 years, spurred by building booms that went bust in places such as Murrieta, Menifee and Desert Hot Springs.
More info here.
Get Your $8,000 HUD Tax Credit Now
Qualified, first-time home buyers using a Federal Housing Administration (FHA)-insured mortgage now can apply the $8,000 federal tax credit toward their down payments, the U.S. Dept. of Housing and Urban Development (HUD) recently announced.
Currently, borrowers applying for a FHA-insured mortgage are required to issue minimum down payments of 3.5 percent. Buyers still must come up with the mandatory 3.5 percent down payment, but the tax credit now can be used as an additional down payment, or for other closing costs, which can help lower principal balances and monthly payments. The home buyer may access their tax credit through participating FHA approved lenders (a small fee will likely be assessed) or a participating non-profit. This may be done through either the purchasing of the home buyer’s tax credit or through a bridge loan.
While HUD allows for state Housing Finance Agencies to offer the tax credit up front to the home buyer, CalHFA like other state programs is experiencing a shortage of capital and is unlikely to offer such a program.
More info here.
California Foreclosure Prevention Act Goes Into Effect June 15th
On February 20, 2009, Governor Schwarzenegger signed ABX2 7 and SBX2 7, the "California Foreclosure Prevention Act" which modifies the foreclosure process to provide additional time for borrowers to work out loan modifications while providing an exemption for mortgage loan servicers that have implemented a comprehensive loan modification program. Civil Code Section 2923.52 requires an additional 90-day period beyond the period already provided before a Notice of Sale can be given in order to allow all parties to pursue a loan modification to prevent foreclosure of loans meeting certain criteria identified in that section.
A mortgage loan servicer who has implemented a comprehensive loan modification program may file an application for exemption from the provisions of Civil Code Section 2923.52. Approval of this application provides the mortgage loan servicer an exemption from the additional 90-day period before filing the Notice of Sale when foreclosing on real property as designated by this Section.
Below is a timeline for the adoption of regulations under this new law. The new law will be operative 14 days after the issuance of regulations. As set forth in this timeline, the anticipated operative date of the law is June 15, 2009.
The Application for Order of Exemption from Civil Code Sction 2923.52(a) California Foreclosure Prevention Act is available on the DOC website.
Real estate licensees may file this application with the DRE at the following address:
Foreclosure Exemptions - Department of Real Estate
P.O. Box 187007
Sacramento, CA 95818-7007
Applications may also be submitted by e-mail to foreclosures@dre.ca.gov.
On June 15, 2009, the law will become operative.
find the article at: http://www.car.org/tools/smart/new/foreclosurepreventionca/
Friday, June 12, 2009
NAR Jumps Head First into the Healthcare Debate
With nearly one-third of REALTORS® lacking ANY health insurance and hundreds of thousands more struggling to pay ever increasing premiums, health reform is an issue of critical importance to our membership.
The goal of the National Association of REALTORS® is to work in partnership with state and local associations in order to create access to affordable health coverage for the self-employed, independent contractors and small businesses. This month, members will be asked to send questions related to health care to NAR. Additional resources will be posted on REALTOR.ORG/healthcare starting Monday, June 15. Watch this space for future developments on this critical issue that impacts our members and their families.
The goal of the National Association of REALTORS® is to work in partnership with state and local associations in order to create access to affordable health coverage for the self-employed, independent contractors and small businesses. This month, members will be asked to send questions related to health care to NAR. Additional resources will be posted on REALTOR.ORG/healthcare starting Monday, June 15. Watch this space for future developments on this critical issue that impacts our members and their families.
New State Senator is sworn into office; upcoming special election to fill Assembly seat
SBAOR congratulates former Assemblymember and now newly-elected State Senator Curren Price (D-26) who was just sworn into office this week. A special election will soon be called to fill his empty seat in Assembly District 51, which includes Gardena, Hawthorne, Inglewood, and Lawndale.
U.S. Regulator: Be Wary of Reverse Mortgages
Some industry analysts, including U.S. bank regulator John Dugan believe that reverse mortgages could be the next subprime mortgage product to gain traction. Dugan says that while reverse mortgages can be beneficial, they also share some of the characteristics of the riskiest types of subprime mortgages.
Although the majority of reverse mortgages is insured by the Federal Housing Administration and poses limited credit risk, a different class of reverse mortgages is becoming popular--“proprietary” products--which offer less consumer protection.
To protect consumers, regulators are crafting guidelines and Dugan is recommending that regulators be more vigilant about misleading marketing and cracking down on lenders who try to bundle a reverse mortgage with other financial products, such as an annuity or life insurance product.
To read the full story, please click here.
Source: CNN and the California Association of REALTORS®
Although the majority of reverse mortgages is insured by the Federal Housing Administration and poses limited credit risk, a different class of reverse mortgages is becoming popular--“proprietary” products--which offer less consumer protection.
To protect consumers, regulators are crafting guidelines and Dugan is recommending that regulators be more vigilant about misleading marketing and cracking down on lenders who try to bundle a reverse mortgage with other financial products, such as an annuity or life insurance product.
To read the full story, please click here.
Source: CNN and the California Association of REALTORS®
FHA Cracks Down on Mortgage Brokers
The Federal Housing Administration is tightening its review of mortgage professionals that are allowed to originate loans.
The Department of Housing and Urban Development requires brokers who originate FHA loans to obtain approval through the agency. People convicted of making fraudulent loans will be barred from the program. Previously, companies were penalized, but individual employees were not.
Richard L. Tracy Jr., a board member of the Connecticut Society of Mortgage Brokers and an FHA-approved lender, says the changes “will go a long way toward getting out the marginal players.”
Source: The New York Times, Bob Tedeschi (06/05/2009) and the National Association of REALTORS®
The Department of Housing and Urban Development requires brokers who originate FHA loans to obtain approval through the agency. People convicted of making fraudulent loans will be barred from the program. Previously, companies were penalized, but individual employees were not.
Richard L. Tracy Jr., a board member of the Connecticut Society of Mortgage Brokers and an FHA-approved lender, says the changes “will go a long way toward getting out the marginal players.”
Source: The New York Times, Bob Tedeschi (06/05/2009) and the National Association of REALTORS®
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